M M Forgings Ltd
Directors Reports
1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2019
|
|
( र in Lakhs) |
|
2018-19 |
2017-18 |
| 1.1. Forging Sales |
88,736.91 |
60,091.09 |
| 1.2. Profit before exceptional items/extraordinary items and
Tax |
10,854.10 |
8,191.36 |
| 1.3 Exceptional/Extraordinary Items |
2.41 |
17.21 |
| 1.4 Profit Before Tax |
10,856.51 |
8,208.57 |
| 1.5 Tax |
|
|
| For current year |
2,192.49 |
1,500.00 |
| Relating to previous years |
- |
- |
| Deferred Tax |
522.03 |
(323.35) |
| MAT credit entitlement |
6.95 |
181.19 |
|
2,721.47 |
1,357.84 |
| Profit After Tax |
8,135.04 |
6,850.73 |
The Directors commend the employees for their commitment and
contribution.
| 2. DIVIDEND AND FINANCIAL RESULTS: |
|
|
|
|
( र in Lakhs) |
|
2018-19 |
2017-18 |
| 2.1. Profit After Tax |
8,135.04 |
6,850.56 |
| 2.2. Balance in P & L Account |
292.62 |
244.72 |
| 2.3. Profit available for appropriation |
8,427.66 |
7,095.48 |
| 2.4. Transfer to General Reserve |
6,700.00 |
5,400.00 |
| 2.5. Interim Dividend paid |
708.97 |
701.43 |
| 2.6 Proposed Dividend |
708.97 |
701.43 |
| 2.7. Balance carried forward |
309.72 |
292.62 |
On 28 May 2019 the Directors declared a second interim dividend of 25
%, र 2.5/ per share of face value of र 10/- each. The Directors earlier declared
first interim dividend of 25% - र 2.5/- per share of face value of र 10/- each
and was paid on 05 March 2019. The Directors do not recommend any final dividend for the
year 2018-19.
3. SHARE CAPITAL
Your Company has increased its authorised share capital from र 15
Crores to र 30 Crores. The paid up capital has doubled from र 12.07 Crores to
##Rs## 24.14 Crores, due to issue of fully paid Bonus Shares in the ratio of 1:1.
4. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE
4.1 The Company has recorded overall Revenue, which crosses र 900
crores.
4.2 For the first time in the history of the Company. PBT crossed the
significant milestone of र 100 crores. 4.3 The Company has recorded PAT which stands
at र 81 crores.
4.4 The Company continues to be a net foreign exchange earner. The net
foreign exchange earnings during the current year were र 277.30 crores.
4.5 The Company has retained its ISO 9001 and TS 16949 Certification
for its Quality Management.
4.6 The increase in domestic sales was 73% and increase in export sales
was 30%.
4.7 Overall sales has marked a growth rate of 48%
4.8 The capital expenditure during the year was र 289.17 crores.
Forgings and machining capacity has been substantially increased in line with customer
demand. The company also produces green energy in its solar and wind farms.
4.9 The Company has acquired 100 % stake in DVS Industries (Private)
Ltd and hence, DVS Industries has become a wholly owned subsidiary company.
5. INDIAN ACCOUNTING STANDARD ( IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification of the Companies ( Indian Accounting
Standard) Rules, 2015 by the Ministry of Corporate Affairs ( MCA) on 16 February 2015, the
company has adopted Indian Accounting standards ( IND AS ).
6. EXPENSES MADE MORE THAN 10 % OF THE TURNOVER
| Raw Material |
– |
` 442.89 Crores (48.15%) |
| Personnel |
– |
` 87.49 Crores (9.51%) |
7. MANAGEMENT DISCUSSION AND ANALYSIS : GLOBAL SCENE
1. After strong growth in 2017 and early 2018, global economic activity
slowed notably in the second half of last year, reflecting a confluence of factors
affecting major economics. China's growth declined following a combination of needed
regulatory tightening to rein in shadow banking and an increase in trade tensions with the
United States. The euro area aconomy lost more momentum than expected as consumer and
business confidence weakened and car production in Geramany was disrupted by the
introduction of new emission standards; investment dropped in Italy as soverign spreads
widened; and external demand, especially from emerging Asia, softened. Elsewhere, natural
disasters hurt activity in Japan.
2. Conditions have eased in 2019 as the US Federal Reserve signaled a
more accommodative monetary policy stance and markets became more optimistic about a
US-China trade deal, but they remain slightly more restrictive than in the fall.
3. Global growth in 2019 is expected to slow to 2.6%, reflecting
weaker-than-expected trade and investment at the start of the year. Growth is projected to
gradually rise to 2.8% by 2021, predicated on continued benign global financing conditions
and a modest recovery in emerging market and developing economies.
4. In the United States, growth is expected to decline to 2.3% in 2019
and soften further to 1.9% in 2020 with the unwinding of fiscal stimulus.
5. Growth in the Euro area is set to moderate from 1.8% in 2018 to
1.3%% in 2019 and recover to1.5% in 2020. Although growth is expected to recover in the
first half of 2019 as some of the temporary factors that held activity back dissipate,
carryover from the weakness in the second half of 2018 is expected to hold the 2019 growth
rate down.
6. Japan's economy is set to grow by 1% in 2019. This revision
mainly reflects additional fiscal support this year, including measures to mitigate the
effects of the planned consumption of tax rate increase in October 2019. Growth is
projected to moderate to 0.5% in 2020.
7. Economic growth in China, despite fiscal stimulus and no further
increase in tariffs from the United States relative to those in force as of September
2018, is projected to slow on an annualized basis in 2019 and 2020. This reflects weaker
underlying growth in 2018, especially in the second half and the impact of lingering trade
tensions with the United States. The projection for 2019 is slightly stronger reflecting
the revised assumption on United States tariffs on Chinese exports while the projection
for 2020 is slightly weaker, as the underlying momentum in activity is more subdued.
8. In India, growth is projected to pick up to 7.3% in 2019 and 7.5% in
2020, supported by the continued recovery of investment and robust consumption amid a more
expansionary stance of monetary policy and some expected impetus from fiscal policy.
Nevertheless, reflecting the recent revision to the national account statistics that
indicated somewhat softer underlying momentum, growth forecasts have been revised downward
compared with the October 2018 World Economic Outlook by 0.1% point for 2019 and 0.2%
point for 2020, respectively.
9. The Dow Jones Industrial Average (DJIA) has increased by
approximately 7 because US stock markets are seen as a haven for investment in a sea of
gloom.
10. Commodities – The Dow Jones Commodity Index (DJCI) has come
down 2%.
11. As a result of these developments, global growth is now projected
to be 2.6% in 2019 before gradually rising to 2.8 – 3% thereafter. The slowdown
reflects weaker-than-expected trade and investments at the start of the year. Growth in
2020 and beyond is predicted on continued benign global financing conditions and a modest
recovery in emerging market and developing economies.
INDIA
12. ndia's GDP is estimated to have increased 7.2% in F18 and 7%
in F19. India's economy is projected to grow at 7.1% in F20 on the back of strong
domestic consumption and investment.
13. During F18 the automotive industry posted growth rates of
approximately 0.5% in the car segment and 16% in the CV segment.
14. Steel prices have increased by about 4% compared to the lows in the
previous year.
15. The INR ended the year higher by approximately 5.75%, ending the
year at a level of र 69.66 per USD. Please refer graph below. Further weakening of
the INR is anticipated. However, if FDI inflows are moderate, the pressure on the INR will
be relieved.
M M FORGINGS – Achievements
16. The following were important developments witnessed during the year
:
• ?Domestic sales crossed record र 420 crore mark!
• ?Export sales crossed record र 460 crore mark!
• ?Total forging sales crossed record र 880 crore mark!
• ?Overall sales reached record of र 919 crore mark!
• ?Record production to 64,000 Tons!
• ?Adding to the volume of existing parts, were the new parts
which were developed in the last 2 years.
• ?The company has posted a huge growth of 73% in domestic
sales by the development of new parts. • ?Export sales also grew by 30%.
• ?Changes in steel prices which are in line with
international markets are generally being passed on to customers as is the industry
practice.
• ?We are focusing on capacity utilisation, to take advantage
of the production capacities created in the last 3 years.
| • Key financial ratios : |
|
|
| Debtors Turnover |
: |
82 days |
| Inventory Turnover |
: |
4.52 |
| Interest Coverage Ratio |
: |
6.63 |
| Current Ratio |
: |
1.85 |
| Debt Equity Ratio |
: |
1.04 |
| Operating Profit Margin (%) |
: |
11.80% |
| Net Profit Margin (%) |
: |
8.84% |
17. As highlighted in the Directors' Report, Return On Net Worth
is 19.03% and Return On Capital Employed is 15.70% . Total Outside Liabilities to Net
Worth stands at 1.76.
18. The details of segment-wise sales distribution are provided below:
Human Resources and Industrial Relations
19. Your company continues to focus on the development of its human
resources to improve its performance. The company currently has approximately 2064
employees. It is their invaluable contribution that has primarily resulted in your
company's position of strength in the industry.
20. Focus on a safe working atmosphere, constantly evolving systems for
recognition and reward, consistent communication and imparting skills and training –
all these focused on meeting customer needs, characterise the HR development of the
Company.
21. Every year, each plant of the Company celebrates
‘Founder's Day' in a family atmosphere with all employees and their
household members.
Health, Safety and Environment
22. The Company follows a policy of zero tolerance towards accidents.
Wherever possible, visible controls and fail-safe systems are provided to ensure
prevention of accidents. Regular communication, periodic reviews of practices and training
play a vital role in maintaining safety standards.
23. The Company ensures compliance with all pollution control
regulations. Adequate pollution control equipments have been installed to treat effluents
and to control air pollution.
Risk Management
24. The Company is a leading manufacturer of automotive components.
Automotive industry is subjected to cyclical variations in performance and is very
sensitive to policy changes. The market is very competitive. Prices of raw materials
change based on supply and demand. Margins remain under constant pressure. Any steep
reduction in off-take exposes the Company to high fixed costs.
25. A considerable portion of the customers of the Company are situated
outside of India. Hence, demand for the Company's product is subject to the health of
the global economy.
26. The Company has spread its risks by increasing the geographic
spread of its customer base. The Company proposes to improve capacity utilization in its
existing facilities. Working capital management will receive high priority.
M M FORGINGS – forging ahead
27. Our goals in the coming months:
• Focus on improving sales in keeping with market conditions.
• Increase the production capacity to 1,10,000 Tons.
• Focus on cost reduction continuously - particularly on
reducing energy consumption and improving productivity. • Enhance IT systems
with the continued development of the ERP system in place.
• Reduce the impact on the environment.
Sources :
1. IMF World Economic Output
2. The Economist
8. TRANSFER TO RESERVE
Transfer to General Reserve - र 67 Crores
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has made advance to the tune of र 84.05 Crores to its
Subsidiary Company, DVS Industries Private Limited, repayable at prevailing rates.
The details of the investments made by the company are given in the
notes to the financial statements. 10. DIRECTORS
There has been no change in the constitution of Board of Directors
during the year under review - the structure of the Board remains the same.
Both Shri. Vidyashankar Krishnan, Vice Chairman and Managing Director
and Shri. K Venkatramanan, Jt. Managing Director were re-appointed for a period of five
years with effect from 1 September 2018. Shri. N Srinivasan, Shri. V Vaidyanathan and
Shri. A. Gopalakrishnan, were re appointed for a period of 5 years with effect from 01
April 2019.
11. RETIRE BY ROTATION
Shri. Vidyashankar Krishnan will retire by rotation and being eligible
has offered himself for re-appointment.
12. DETAILS OF DIRECTORS OR KMP RESIGNED DURING THE YEAR –
NIL
13. BOARD AND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report.
14. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT
ACCEPTED BY THE BOARD ALONG WITH REASONS – None
13. RISK MANAGEMENT
Your Company has implemented a mechanism for risk management and has
formulated a Risk Management Policy. The Policy provides for identification of risks and
mitigation measures. The Audit Committee is informed on the risk assessment and
minimizations mechanism adopted by the Company.
14. RELATED PARTY TRANSACTION
The Company has formulated a policy on related party transactions and
the same is uploaded on the Company's website, http://www.mmforgings.com/financials
All Related Party transactions that were entered into by the Company
during the financial year 2018-19, were in compliance of Section 188 of the Companies Act,
2013 and the Rules framed thereunder. There are no "Material" contracts or
arrangement or transactions at arm's length basis.
All Related Party transactions were placed before the Audit Committee
for their prior approval in accordance with the requirements of the SEBI LODR. The
transactions entered into pursuant to such approval are placed periodically before the
Audit Committee for its review.
There are no materially significant Related Party transactions made by
the Company with Promoters, Directors, and Key Managerial Personnel which may have a
potential conflict with the interest of the Company at large.
For related party transactions, refer Annexure 3, under the head
‘Disclosures'
15. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has
adopted a CSR Policy as recommended by the Committee. The thrust areas of CSR Policy are
Eradicating Hunger and Poverty, Education, Combating Diseases and Social Business
Projects.
Your Company has fulfilled its obligation towards CSR, by spending a
sum of र 137.59 Lakhs during the year.
Annual report on CSR has been provided in Annexure III of this Report.
16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
In terms of provision of section 178 of the Companies Act, 2013 read
with Rules prescribed, a policy for the Directors, KMP and other employees has been
adopted by the Board of Directors of the Company analyzing the criteria for determining
qualifications, positive attributes and independence of a Director. The said Policy is
provided in Company's website link http://www.mmforgings.com/financials.
17. PARTICULARS OF EMPLOYEES
The information required under the rules prescribed, has been given in
the annexure appended hereto and forms part of this Report.
18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :
18.1 The ratio of remuneration of each Director to the median
remuneration of the employees:
| Name |
Ratio |
| Shri. Srinivasan. N |
3.05 : 1 |
| Shri. Vaidyanathan. V |
1.63 : 1 |
| Shri. A.Gopalakrishnan |
1.22 : 1 |
| Ms. Kavitha Vijay |
1.22 : 1 |
| Shri. Vidyashankar Krishnan |
234.00 : 1 |
| Shri. K.Venkatramanan |
233.83 : 1 |
For this purpose, sitting fees paid to the Directors have not been
considered as remuneration.
18.2 Percentage increase in remuneration of each Director, KMP, in the
financial year:
| Name |
% Increase |
| Shri. Srinivasan. N |
1.92 % |
| Shri. Vaidyanathan. V |
-4.17 % |
| Shri. A.Gopalakrishnan |
- |
| Ms. Kavitha Vijay |
- |
| Shri. Vidyashankar Krishnan |
34.45 % |
| Shri. K.Venkatramanan |
7.95 % |
| Smt. J.Sumathi |
7.95 % |
| Shri R.Venkatakrishnan |
1.98 % |
18.3 Percentage increase in median remuneration of employees is 64.60%
in the financial year 2018-19.
18.4 The number of permanent employees on the rolls of Company : 2,064
18.5 Explanation of relationship between average increase in
remuneration and company performance : PAT - ( last year) - र 6,850.56 Lakhs; PAT - (
this year) - र 8,135.07 Lakhs.
Increase 18.75% against which, the average increase in remuneration is
34%.
18.6 Comparison of remuneration of each KMP against performance of
company
| Name |
Designation |
CTC |
% Increase |
PAT ##Rs## in Lakhs |
% in PAT |
|
|
in ` |
|
|
|
| Vidyashankar Krishnan |
CEO |
57,509,798 |
31.08 |
|
|
| J.Sumathi |
Company Secretary |
1,134,894 |
7.95 |
8,135.04 |
18.75 |
| R.Venkatakrishnan |
CFO |
1,601,283 |
1.98 |
|
|
18.7 Variation in market cap/net worth of company:
| Date |
Issued Capital |
Closing market Price per share in ` |
EPS |
PE Ratio |
Market Capitalisation |
|
(Shares) |
|
|
|
` in Crores |
| 31.03.2018 |
12,070,400 |
1038 |
56.76 |
18.29 |
1,252.90 |
| 31.03.2019 |
12,070,400 |
1,038.00 |
56.76 |
18.29 |
1,252.91 |
| 31.03.2019 (post bonus issue) |
24,140,800 |
544.00 |
33.73 |
16.13 |
1,313.26 |
| Increase / (Decrease) (post bonus issue) |
12,070,400 |
-494 |
-23.03 |
-2.16 |
60.35 |
| % of Increase / (Decrease) (post bonus issue) |
100% |
-47.59% |
-40.57% |
-11.81% |
4.82% |
18.8 Justification of increase in managerial remuneration with that of
increase in remuneration of other employees.
Average Increase in Remuneration for employees other than Directors and
KMP is 35.90%. Average Increase in Remuneration for KMP and Senior Management is 31.10%.
18.9 Key parameters for any variable remuneration of Directors:
Directors are paid Commission. However, the overall managerial
remuneration payable is subject to the provisions of the Companies Act, 2013.
18.10 Ratio of remuneration of highest paid Director to other employees
who gets remuneration more than highest paid Director. – NOT APPLICABLE.
18.11 Is remuneration is as per remuneration policy of the Company:
YES.
19 SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATIONS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN
FUTURE: Not applicable.
20 MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE
FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2019 TILL THE DATE OF THE
REPORT:
Not applicable
21 DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation
of the accompanying financial statements by taking all reasonable steps to ensure that -
21.1 In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation relating to
material departures;
21.2 The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company as at 31 March 2019
and of the profit or loss of the company for that period ended on that date;
21.3 The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the company and for preventing and detecting
fraud and other irregularities;
21.4 The Directors had prepared the annual accounts on a going concern
basis.
21.5 The Directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively.
21.6 The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
22 ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle
Blower Policy has been in vogue. The Whistle Blower Policy covering all employees and
Directors is hosted on the Company's web, http://www.mmforgings.com/financials.
A high level Committee has been constituted which looks into the
complaints raised. The Committee reports to the Audit Committee and the Board.
23 ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company had laid down Internal Financial Controls and such internal
financial controls are adequate with reference to the Financial Statements and were
operating effectively.
It also ensures the orderly efficient conduct of its business,
including adherence to Company's policies, the safe guarding of its assets, the
prevention and detention of frauds and errors, the accuracy and completeness of the
accounting records and the timely preparation of reliable financial information during the
year, such controls were tested and bi-material weakness in the operations were observed.
24 CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the company. The
company is committed to ethical management and excellence in performance. Details are
provided in Annexure III.
25 ANNUAL RETURN
An extract of Annual Return as on 31 March 2019 pursuant to Section 92
(3) of the Companies Act, 2013 and forming part of the report is attached separately.
26 A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL
EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES
AND INDIVIDUAL DIRECTORS;
1. Nomination and Remuneration Committee of the Board had prepared and
sent through its Chairman draft parameterized feed back forms for evaluation of the Board,
Independent Directors and Chairman.
2. Independent Directors at a meeting without anyone from the
non-independent Directors and management, considered/evaluated the Board's
performance, performance of the Chairman and other non-independent Directors. Their
meeting was held on 16 November 2018.
3. The Board subsequently evaluated performance of the Board, the
Committees and Independent Directors (without participation of the relevant Director)
4. i) Observations of board evaluation carried out for the year:
The main inputs received from the Directors, covering various aspects
of the Boards functioning was with regard to adequacy of the composition of the Board and
its Committees, Board culture, execution and performance of specific duties, obligations
and governance.
A separate exercise was carried out to evaluate the performance of
individual Directors including the Chairman of the Board, who were evaluated on parameters
such as level of engagement and contribution, independence of judgement, safeguarding the
interest of the Company and its minority shareholders. The performance evaluation of the
Independent Directors was carried out by the entire Board. The performance evaluation of
the Non Independent Directors and Top Managerial Personnel were carried out by the
Independent Directors. The Directors expressed their satisfaction with the evaluation
process.
ii) Previous year's observations and actions taken - NIL
iii) Proposed actions based on current year observations - NIL
27 FAMILIARISATION OF PROGRAMME ARRANGED FOR INDEPENDENT
DIRECTORS
• ?M M Forgings Limited has put in place a system to
familiarise the independent Directors about the company, its products, business and the
on-going events relating to the company.
• ?Independent Directors of the Company are made aware of
their role, responsibilities and liabilities at the time of their appointment /
re-appointment , through a formal letter of appointment, which also stipulates various
terms and conditions of their engagement.
• ?They are also made aware of Company's Board and Board
Committee framework, policies and procedures.
• ?As part of Board Discussions, presentations on business of
the Company are made to the Directors from time to time.
• ?Important announcements and press releases for various news
related to the company are forwarded to the Directors from time to time.
• ?Each member of the Board, including the independent
Directors, have been given complete access to any information relating to the Company.
• ?You may also view the company website
http://www.mmforgings.com/financials in this regard.
28 AUDITORS:
G R N K & Co., Chartered Accountants (FRN 016847S) have been
appointed as the Statutory Auditors of the Company in the 71st Annual General
Meeting held on 26 September 2017. They will hold office for a period of five years.
There is no audit qualification, reservation or adverse remark for the
year under review.
29. SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act, 2013, the Company
has appointed V.Shankar, Practicing Company Secretary (C.P. No. 12974) as the Secretarial
Auditor for the financial year 2018-19 whose report of 28 May 2019 is attached separately
to this report.
30. COST AUDITOR
Pursuant to the provisions contained in Rule 14 of the Companies (
Audit and Auditors) Rules, 2014, Shri. S. Hariharan ( CP No. 20864) has been appointed as
Cost Auditor for the financial year 2019-20.
31 SUBSIDIARY COMPANY - DVS INDUSTRIES PRIVATE LIMITED
Your company has acquired 100 % majority stake in DVS Industries
Private Limited for cash consideration, who is a leading manufacturer of crank shafts,
automobile crank shafts and diesel engines.
With this acquisition, your company will enhance synergies between
it's wide ranging capability in forgings and machining and DVS Industries' long
standing expertise in machining of crankshafts.
Incorporated in 1992, DVS Industries (with the paid-up share capital
currently being र 1,59,29,900/ and turn-over of `18.06 Crores in FY 2018) is a North
India based player with its manufacturing unit located in Pantnagar, Uttarakhand. DVS
Industries is well equipped with robust manufacturing processes, precision equipment, in
house tool room inspection facilities, well trained personnel etc.
32 EXPLANATION TO AUDITOR'S REMARK
There are no qualifications, reservations or adverse remarks or
disclaimers made by the Statutory Auditors and Company Secretary in practice in their
reports respectively. The Statutory Auditors have not reported any incident of fraud to
the Audit Committee of the Company in the year under review.
33 SAFETY
Employees have been encouraged to adhere to safety in all their
activities in and out of the Company premises. Safety training at all levels have been
provided by the Company.
34 DEPOSITS:
The Company does not have any deposits. Fresh deposits are not being
accepted by the Company.
35 ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 134 (3) of the Companies
Act, 2013, read with the Companies (Accounts)) Rules, 2014 with respect to Energy
Conservation, Technology Absorption, Research & Development and Foreign Exchange
Earnings / Outgo are given in Annexure
36 DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to
the Company as required under sub section (6) of Section 149 of the Companies Act, 2013.
37 PROHIBITION AND REDRESSAL OF SEXUAL HARRASSMENT OF WOMEN AT
WORK PLACE
During the year under review, pursuant to the new legislation,
‘Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace
Act, 2013' introduced by the Government of India, which came into effect from 09
December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at
Workplace. There were no cases reported during the year under review under the said
Policy.
Disclosures in relation to the Sexual Harassment of Women in work place
: No. of complaints filed during the year – 0 No of complaints disposed of during the
year – 0 No of complaints pending as on the end of the financial year - 0
38 ACKNOWLEDGEMENT:
Your Directors would like to express their gratitude for the
cooperation and continued assistance received from Citibank N.A., DBS bank , HDFC Bank,
State Bank of India, ICICI Bank and Federal Bank
Your Directors wish to record their appreciation for the exemplary
services rendered by the employees of the company. The results achieved would not have
been possible but for their outstanding effort.
Above all the Directors thank the shareholders for their continued
confidence in the management.
|
For and On behalf of the Board |
| Place : Chennai |
Vidyashankar Krishnan |
| Date : 28 May 2019 |
Chairman of this meeting |
|
(DIN 00081441) |
Annexure I – to the Directors' Report:
Information in accordance with Section 134 of the Companies Act, 2013
and as per (requirement of Rule 8(3) of The Companies (Accounts) Rules, 2014) and forming
part of the report of the Directors for the year 31 March 2019.
(A) CONSERVATION OF ENERGY:
1. Energy conservation methods undertaken:
1.1 Conservation of energy is a continuous process. We have spent
around र 50 lakhs to improve efficiency and saving on power consumption.
1.2 Buildings are set up with natural lighting and energy efficient LED
lights.
1.3 Consumption of Light Diesel Oil and Furnace Oil is closely
monitored to conserve energy.
1.4 Extracting waste heat from forgings to reduce energy consumption in
Heat Treatment.
2. Additional investment and proposals, if any, being implemented for
the reduction in consumption of energy: Optimising energy consumption. Close monitoring of
Power Consumption of Induction Billet Heaters to reduce power consumption.
3. Green Power : The Company has generated 204.95 lakh units from its
Wind and 28.01 lakh units from Solar farms equivalent to approximately 18915 tons of CO2
from Wind and 2585 tons of CO2 in the year. from Solar, totalling a saving of
21,500 tons of CO2
4. Impact of measures at 1, 2 & 3 for reduction of energy
consumption and consequent impact on the cost of production of goods: It is not possible
to determine the figure.
|
2018-19 |
2017-18 |
| 1 ELECTRICITY |
|
|
| a. Purchased: |
|
|
| Units |
7,69,99,739 |
6,17,27,144 |
| Total Amount. (`) |
65,54,97,733 |
51,01,25,424 |
| Rate / Unit (`) |
8.51 |
8.26 |
| b. Own Generation: |
|
|
| Units |
5,74,488 |
1,64,143 |
| Units per ltr. |
3.86 |
3.03 |
| Cost / Unit (`) |
20.22 |
21.92 |
| 2. FUEL OIL |
|
|
| Quantity (in ltrs) |
34,21,846 |
26,69,009 |
| Total amount (`) |
14,18,72,470 |
7,86,38,729 |
| Average Rate (`/ltr.) |
41.46 |
29.46 |
| 3 CONSUMPTION PER UNIT OF PRODUCTION |
|
|
| a. Electricity Units |
1215 |
1250 |
| b. Fuel Oil Litres |
54 |
54 |
Note: No standards are available for comparison.
(B) TECHNOLOGY ABSORPTION:RESEARCH AND DEVELOPMENT (R &D)
Specific areas in which R & D are carried out by the company:
1. R & D efforts in a manufacturing industry like ours, is an
ongoing process. Continuous efforts have been taken in various areas of the manufacturing
activity.
2. Benefits derived as a result of the above R & D: It has not been
possible to determine the figure.
3. Future plan of action:
Continuous efforts are being put in by way of Research &
Development in all the areas of manufacturing to reduce the cost of major inputs such as
steel, fuel, power, etc.
4. Expenditure on R & D: Not less than र 100 lakhs though
indirectly.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
1. Efforts, in brief, made towards technology absorption, adaptation
and innovation:
1.1. Continuous efforts are made on conservation of raw material by
improving design and layout of dies.
1.2. The Company has upgraded its Quality Management Systems to TS
16949
2. Benefits derived as a result of the above efforts:
2.1. Reduction in raw material consumption.
2.2. With the accreditation to TS 16949 many new export customers are
being developed.
2.3. Technology imported during the last 5 years: Nil
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
| 1 Activities relating |
Exports at र 46,355.02 lakhs form a significant part of
the company's turnover (` 35,559.47 lakhs in 2017-18) |
| 2 Initiatives taken to increase development of new export
markets for products and services and export plan |
a. Vigorous efforts are taken by marketing department to
locate new multinational customers in addition to the existing multinationals. |
|
b. The Company has been consistently retaining the TS 16949
certification for its Quality Management system. |
| 3 Total Foreign Exchange (` 3,45,46,26,005 IN 2017-18) |
Earned: र 4,91,14,62,532 |
|
a. Used: र 1,21,49,10,723 |
|
(` 68,15,92,660 IN 2017-18) |
|
For and On behalf of the Board |
| Place : Chennai |
Vidyashankar Krishnan |
| Date : 28 May 2019 |
Chairman of this meeting |
|
(DIN 00081441) |
ANNEXURE II FORMING PART OF THE REPORT OF THE DIRECTORS
(Information as per Section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules,1975 and forming part of the Report of the
Directors for the year ended 31.03.2019
| Sl. No |
Name |
Designation |
Remuneration |
Qualification |
Experience (years) |
Date of Joining |
Age |
Last Employment |
% of shares held in the Company |
| a) |
Employed throughout the year and were in receipt
of remuneration at a rate of not less than 24,00,000 per annum |
| 1 |
Shri Vidyashankar Krishnan |
Vice Chairman and Managing Director |
5,75,09,798 |
B.E.,M.S. |
29 |
25.06.1990 |
53 |
Nil |
11.27% |
|
DIN: 00081441 |
|
|
|
|
|
|
|
|
| 2 |
Shri. K.Venkatramanan |
Jt. Managing Director |
5,74,67,437 |
B.E. |
27 |
24.01.1992 |
49 |
Nil |
10.71% |
|
DIN : 00823317 |
|
|
|
|
|
|
|
|
| b) |
Employed for a part of the year and were in receipt of
remuneration at a rate of not less than 8,50,000 per month |
|
None |
|
|
|
|
|
|
Note:
1. Remuneration as shown above includes
salary,commission,employer's contribution to Provident Fund and value of perquisites
together with other allowances.
Form AOC – 2
(Pursuant to clause (h) of sub –section (3) of section 134 of the
Act and Rule 8 (2 ) of the Companies ( Accounts) Rules, 2014)
Form for disclosure of particulars of contracts / arrangements entered
into by the company with related parties referred to in sub-section 91) of section 188 of
the Companies Act, 2013 including certain arms length transactions under third proviso
thereto.
1. Details of contracts or arrangements or transactions not at
arm's length basis - NIL
1.1 Name (s) of the related party and nature of relationship
1.2 Nature of contracts/ arrangements/ transaction
1.3 Duration of the contracts / arrangements/ transactions
1.4 Salient terms of the contracts or arrangements or transactions
including the value, if any
1.5 Justification for entering into such contracts or arrangements or
transactions
1.6 Date (s) of approval by the Board
1.7 Amount paid as advances , if any:
1.8 Date on which the special resolution was passed in general meeting
as required under first proviso to section 188.
2. Details of material contracts or arrangements or transactions not at
arm's length basis - NIL
2.1 Name (s) of the related party and nature of relationship
2.2 Nature of contracts/ arrangements/ transaction
2.3 Duration of the contracts / arrangements/ transactions
2.4 Salient terms of the contracts or arrangements or transactions
including the value, if any
2.5 Date (s) of approval by the Board
2.6 Amount paid as advances , if any:
| In terms of our Report of even date |
|
|
| For GRNK & Co. |
Vidyashankar Krishnan |
V.Vaidyanathan |
| Chartered Accountants |
Chairman of this Meeting - |
Director |
| FRN 016847S |
Vice Chairman and Managing Director |
(DIN : 00081792) |
|
(DIN : 00081441) |
|
| G. R. Naresh Kumar |
Kavitha Vijay |
J.Sumathi |
| Proprietor |
Director |
Company Secretary |
| Membership no. 215577 |
(DIN : 01047261) |
|
| Place : Chennai |
R.Venkatakrishnan |
|
| Date : 28 May 2019 |
Chief Financial Officer |
|
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